Author: Mark Fletcher

The re-energised OZ Lotterties business looks interesting. Their website is enticing and makes buying easy. Given the success of the Tattersalls website it will be interesting to see how this goes. The site itself is better than the Tattersalls offering from a user perspective in my view.

Lottery related traffic is important to newsagencies. Take this Thursday for instance. The $12 million Powerball jackpot will give my store a traffic boost of 20%. If I lose some of that to online there are flow-on effects. So, the time to plan for this is now. Online lottery businesses will only grow in number.

We have launched our campaign for COOK, the 600+ page cookbook from ACP. I blogged two weeks ago about how Big W was spoiling the party for all retailers by selling COOK at cost or within cents of it. We let Big W play their gorilla game and run stocks low before launching our own offer. While we are discounting the title more than we planned, the gift certificate offer keeps the discount spend in store and, hopefully, builds loyalty.

Our display has been up for four days. Sales are good. Most have been an add-on to an existing purchase. We’ve located the display near our cookbooks to drive sales within the food category.

What I like about this offer is that it broadens our appeal – something newsagents need to do more of.

Despite dudding newsagents last month by placing their Pink Ribbon magazine exclusively with Woolworths, the National Breast Cancer Foundation is, through its commercial partners, is pushing other Pink Ribbon products on newsagents. We are being asked to sell pens, pads, bands, badges – all manner of products. It is disappointing that the NBCF is yet to respond to my complaint and complaints from other newsagents about their exclusive Woolworths deal. I emailed them on September 24 and have not received a response. The deal with Woolworths and the lack of dialogue with newsagents following complaints is causing newsagents to reject Pink Ribbon products.

There is an unpleasant smell about how commercial the Pink Ribbon campaign has become. The Woolworths deal could well be a tipping point. It makes me want to know exactly how much of what I pay for a Pink Ribbon branded product goes to breast cancer research. If it is less than 20% then I am better off making a cash donation to a less commercially connected fund raising body.

My shop recently raised $250.00 in direct donations for the Steve and Terri Irwin Wildlife Warriors Foundation. There were not gimmicks. 100% of what was raised went to the charity. No sexy posters. No exclusive deals. This was grass roots fund raising for an excellent cause. Maybe the NBCF could cut out the corporates and get back to basics. In the meantime I’m not stocking Pink Ribbon products.

The Herald & Weekly Times is running a great encyclopedia CD-ROM promotion on weekends at the moment. It’s boosting sales and promoting the newspaper as being concerned about building knowledge. The scale out of CDs has been handled well and we have good marketing collateral to enable us to promote. Wins all around.

In SA, as I blogged a few days ago, the story is different. There, Advertiser Newspapers is about to run what will be an very successful promotion where readers will build a robot over weeks. The promotion is to run exclusively with BP and On the Run outlets. Newsagent are the losers.

The H&WT and Advertiser Newspapers are both owned by News Ltd. News wants its newspapers in as many outlets as possible. It also tells newsagents that they remain its key distribution and retail channel. Yet News executives in seem to disagree on the value of the newsagent relationship.

Why News runs its promotions differently, through different retail partners, is a conundrum. If there is an issue with newsagents, talk to them and demand it be fixed. Don’t turn your back on the channel as has happened last year in SA and is about to happen again as this will only make matters worse. The newsagent channel is an asset to News and ought to be nurtured as such.

My newsagency is open 7 days a week. I comply with all News’ requirements. I promote their offers aggressively. If the H&WT was to run a major retail based promotion in a channel other than newsagencies I’d have to consider a commercial response. News either believes newsagents are their key channel or not.

Photo from Herald Sun website.

In its Annual Report released to Parliament yesterday, Australia Post spin achieves new heights. The spin starts with:

The core products and services offered through our postal outlets include letter and parcel services and a wide range of agency-based services, including bill payment, agency banking, money orders, passport interviews, personal identity and verification services, travellers’ cheques and money transfers.

We also offer a variety of merchandise that complements those core products and services, including packaging and philatelic products, stationery, communications products, office and computer products, and gifts and cards.

This is nonsense. Visit any of the Government owned 857 Post Shops and you will see what they consider to be core. Stationery, gifts, imported crap from China. Postal products are the poor cousin of their retail story. Most Post Shops don’t look like letter or mail services. Indeed, if you want to use these services you have to queue for too long for mediocre service – all the while being tempted with their newsagent like merchandise.

The Annual Report has been written as it has because of the requirements of the Act under which Australia Post operates.

Australia Post is abusing the provisions of the Act to take business from independent small retailers like newsagents. That our Government is competing with us in this way makes a mockery of their small business policy.

Try as we might, it’s been impossible to get Tattersalls, NSW Lotteries, SA Lotteries, Lottery West or the QLD Casket office to agree to feed sales data to our Point of Sale system. In my own newsagency this means double handling. When I sell a lottery ticket I complete the sale on the Tattersalls terminal and then have to ring the same data up on the point of sale screen. If I don’t do this I have less control over the cash and I have no way of tracking what is sold with the lottery ticket – this basket data is crucial to any retailer. The lottery businesses cite security as the reason for not agreeing to a link. I say this is nonsense. All I want is a one way data feed of the sale value to save manual entry at the POS screen.

If such a link were implemented by the lottery companies, newsagents and others would have better cash management and better basket data – both leading to an improvement in business. Now why would our lottery suppliers not want those outcomes?

Farmers have extracted yet more money from a willing government for drought relief while many newsagents continue to struggle with the impact of deregulation imposed in 1999. While I fervently believe in a free market, it is unreasonable that this was imposed on the newsagent channel without any assistance to adjust the 4,600 businesses for open competition. A key element of assistance ought to have been fixing the magazine supply model which continues to see newsagents supplied non top-200 selling titles on terms which are inequitable. These are titles those competing with newsagents refuse to carry. Try as they might, newsagents struggle daily with magazine distributors to achieve a net reduction in range.

Rod King and his team at Bingara Newsagency are the latest in a long line of newsagencies to be recognised in business awards. His country town newsagency is a finalist in the Champion of Champions Awards (Specialised Small Business category). I first noticed Bingara Newsagency when they were one of three equal winners of the Tower Systems Fast 3 Awards – awarded to the three fastest growing newsagencies based on year-on-year same store sales comparison. Well done Rod and the team!

News Ltd has botched its support of the Wildlife Warriors charity established by the late Steve Irwin and his wife Terri. News is promoting the sale a green band for $1.00 to raise funds for the charity. Newsagents in NSW report being provided too little stock to satisfy demand. Several I spoke with sold out by noon. With newsagents the only outlet, they ought to have been supplied more than the number of newspapers they sell. Instead, they were supplied less. Significantly less. Making matters worse is a slow backup stock system which means newsagents won’t have bands until Tuesday. Too late.

It’s in South Australia that News Ltd really stuffed up. They ignored newsagents and appointed BP the exclusive distributor of the bands. This is nuts. I’d expect they would have sold more bands and raised more funds had they used newsagents. The takeaway for newsagents has to be that News considers them less relevant than BP.

In Victoria, a week ago, the bands were handled better by the Herald and Weekly Times folks.

Newsagents are being paid ten cents for every band sold – to cover their administration costs. Newsagents I have spoken with would have been happy to receive nothing as long as they were given sufficient stock to make the fund raiser work for the charity and as long as others in the supply chain worked for no margin as well.

If News was serious about raising the maximum amount of funds it would have run the campaign on one day nationally and leveraged better PR as a result. It would have used newsagents and, indeed, all newspaper outlets. It would have ensured sufficient stock and a good backup plan. That’s if it wanted to raise the maximum funds for the charity possible. (I appreciate that marketing plans are set months in advance and not all states could agree on the one date – but this campaign was unexpected and important to Australians.)

Turning this fund raiser into a commercial strategy and cutting out your core distribution channel as happened in South Australia is poor form. I reckon Steve Irwin would have something to say about it.

Photo from Sunday Telegraph website.

I like that magazine publishers adjust the cover price of titles. Whatever their motivation it provides retailers like newsagents with extra revenue to cover increased rent, labour and other costs. Newspaper publishers, on the other hand, continue to hike up advertising rates while barely adjusting the cover price. Sure there has been some movement this year. However, looking at data for the last ten years the shift in the cover price of top selling magazines is more commercially attuned than what I see for newspapers. Some titles have increased by 25% while top selling papers are up by 10% in the same period. Labour and rent for many newsagents have increased by more than 40% in the same period.

Here is the poster we have created for our COOK book promotion. Remember, Big W are selling this for $36.95, less than our buy price. Our store is being dressed with A1 posters surrounding our stock with a hope that the stack em high watch em fly strategy works. Big W are demonstrating a lack of creativity in their approach, but they usually do. While discounting will move the stock, the question has to be what does this do for the brand and for Big W. Deep discounting is like a drug addiction. Either you continue or, through intervention, you clean up and see that there is a brighter future. Our approach is rooted in a longer term view which respects the product and our own brand.